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A large selection of property in Portugal for sale - Residential : Apartments - Houses - Villas - Plots - Ruins. Commercial : All types
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Buying property in Portugal
Buying property in Portugal can be daunting, especially if you haven’t done it before. To give you an idea of what to expect, we have put together this quick guide to finding, viewing and buying property in Portugal. Obviously anyone buying a property through us will receive a much more comprehensive free overview as well as plenty of other help and assistance.
- Finding a property to buy in Portugal
- Starting your Portuguese Property Search
- Viewing Property in Portugal
- Making an offer to buy a Portuguese property
- What happens once your offer has been accepted?
- The legal process of buying a property in Portugal
- Budgeting to finance your Portuguese property purchase
- Additional costs
- Final word!
There is a great choice of property for sale in Portugal:
- studio apartments
- flats or apartments
- houses and villas
- traditional Portuguese farmhouses
- country estates
- ruins for renovation
- building plots
- off-plan investments
- commercial property
In Portugal property prices can vary enormously depending where the property is located. For example, a particular budget may buy an apartment in one region of Portugal … or a detached house in another. So if you can’t find the type of property you want to buy in one region, it might be worth searching for property in another part Portugal.
You can use our search facility to find property for sale in Portugal and, to save you having to keep coming back to our site to see if there’s anything new on the market, you can register with us and we’ll email you with updates as similar properties become available.
Once you have registered with us, you can log into the user area of our site where you can change your search criteria, see your property matches and create a shortlist of your favourite properties. We will keep your match and shortlist updated by removing properties as they sell.
You can either request viewings from your list of favourite properties in the user area of our website or by emailing us. We will assist where we can with your trip and book your viewing appointments with our bi-lingual associates.
Once you have found the property that you want to buy, our associates will help you with the negotiations. There is no rule of thumb in Portugal regarding flexibility on asking prices - many vendors will not consider a reduced offer; there are others who might be prepared to negotiate a little, and some are more flexible. This varies from region to region and from vendor to vendor ..... misunderstanding these subtle nuances can cause great offence so take advantage of our experienced and knowledgeable colleagues and let them guide you through what can sometimes be very delicate negotiations.
When a sale and purchase has been agreed, it is customary in Portugal for the buyer to "show intent" with a returnable deposit of €2,500 (two thousand five hundred euros) - this is then deducted from the sale price. This custom is practised by the Portuguese themselves - ie it is not exclusive to overseas buyers - and is seen to be the equivalent of a "handshake". We would advise you to have these funds readily available so that you can feel confident of securing the property.
Mortgage companies will obviously insist that the property is valued however it is not customary in Portugal for Portuguese buyers to have a survey. For your peace of mind, we would recommend that you have a survey and you should consider using a professional surveyor and valuer who belongs to the Associação Portuguesa dos Chartered Surveyors – a branch of the Royal Institute of Chartered Surveyors.
If you are considering commissioning a new-build or restoring a ruin, we can recommend architects (who will guide you through the planning process and are generally very happy to act as project managers) and builders.
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The legal process of buying property in Portugal is similar to that in the UK with the notable exception that, in most cases, the vendor will not have a legal representative. It is a legal requirement of the Portuguese system for the legal aspects of the sale and purchase to take place in front of an independent notary.
As in the UK it is not compulsory to use a lawyer (advogado) or legal executive (solicitadore) when purchasing property - but we would strongly advise that you do employ either a lawyer or a legal executive - not only for peace of mind and for your own protection, but, unless you are fluent in Portuguese, all the contractual documents have to be in Portuguese.
It is usually more efficient and cost-effective to instruct a Portuguese lawyer or legal executive – giving him/her Power of Attorney for the duration of the conveyance. We are happy to recommend independent Portuguese Lawyers and Legal Executives who are bi-lingual and who have experience of working for overseas buyers.
It is compulsory to obtain a fiscal number from the local tax office before the purchase is completed and most lawyers or legal executives will include this as part of their service.
On completion of the pre-contract enquiries and searches a Promissory Contract (contrato promessa de compra e venda) is exchanged by both parties – this contract contains all of the conditions agreed with the vendor, including a completion date (escritura pública de compra e venda). At the time of the Promissory Contract, an agreed deposit (sinal) is paid by the purchaser to the vendor - generally this is something between 10-30% of the purchase price. The higher the amount of the deposit the better, and we would advise at least 20%. Why? Unlike the UK, the vendor can legitimately accept a higher offer right up to completion. Therefore, even at this stage there is no legal obligation for the vendor to complete the transaction - but should he/she renege on the sale they must refund twice the deposit monies to the unsuccessful purchaser. A large deposit naturally reduces the risk of this happening.
Once all the information and details of the transaction have been verified, the official Portugal Property Deed (escritura pública de compra e venda) is signed by all parties at a Notary’s (Notários) office.
Purchases attract the IMT property tax, which is updated every January and operates on a sliding scale depending on the purchase price – your legal representative will advise you of the IMT due. The completion of the transaction involves registration with the Land Registry (Conservatória do Registo Predial), Inland Revenue (Repartição de Finanças) and rates payment (contribuição predial). The balance of the purchase price is paid to the vendor at this time.
We would recommend you draw-up a separate Will for your new Portuguese assets, and again this is something that your lawyer will be able to help with.
Budgeting to finance your Portuguese Property Purchase
We recommend that you to arrange your finances before you find your dream property – the market can move quickly and the opportunities are obviously greater if you are in a position to act immediately.
You will need to budget for:
- about €2,500 available immediately to secure the property
- the deposit due on exchange of contracts (usually between 15-25% of the purchase price)
- the balance of the purchase price
- IMT property tax (up to a maximum of 8% of the purchase price)
- legal fees
- notarial and land registry fees (about 1.5% of the purchase price)
- the cost of moving/furnishing the property
- and, if relevant
- surveyor’s fees or mortgage arrangement and valuation fees
- build costs or repairs
- architects fees
- connection costs for services
The cost of transferring large amounts of money into Euros can vary quite considerably – and the High Street Banks generally offer the worst rates. You can save thousands by using a Foreign Exchange bureau and we would be delighted to recommend a reputable independent bureau to you – so you will have the confidence of knowing that you have been able to exchange currency at the most favourable rate.
If you want to raise a mortgage to fund your purchase, we can also put you in touch with independent Mortgages Brokers who have access to a wide range of mortgages.
Once you have completed your purchase, if you are not going to reside in Portugal you will need to appoint a Fiscal Representative. Under Portuguese law, all non-Portuguese non-residents who own a property in Portugal must appoint a fiscal representative - who must be Portuguese resident (of any nationality). A fiscal representative undertakes to deal with the Portuguese Tax Authorities on your behalf – for example overseeing the payment of Council Tax, Income Tax (if you are renting out your property), etc. You can appoint a professional (your Portuguese lawyer should be able to recommend a specialist) or your representative can just be a friend. If you wish, they can also receive your bank statements (to make sure that you have sufficient funds available for your regular outgoings) and ensure that your bank is paying your standing orders (e.g. for utility bills and property taxes).
Portugal is a great country with a fantastic climate and populated by warm and friendly people - making it a wonderful place to own a property. As with property purchases anywhere in the world, you should seek professional advice to ensure your investment is secure – CAVEAT EMPTOR …… let the buyer beware!